Logitech International S.a. · SIX:LOGN
Logitech International — Q2 2019 Earnings Presentation
25 slides from Logitech International's earnings presentation, Oct 23, 2018
Slide 1: Q2 Fiscal Year 2019 Financial Results
logitech Q2 Fiscal Year 2019 Financial Results Lausanne, October 23, 2018
Slide 2: Forward-looking statements
This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three and six months ended September 30, 2018, key growth initiatives, brands, innovation, prod
Slide 3: Key Messages - Q2 FY 2019
KEY MESSAGES —- Q2 FY 2019 Strong performance, with Q2’19 sales up 10% (CC) to a record Sept quarter level of $691M Doubling down on key growth initiatives, with Gaming +43% and Video Collaboration +25% Continued strong gross margin of 37.6% ' supported investments in sales & marketing and R&D to ca
Slide 4: What's New from Logitech
WHAT’S NEW FROM LOGITECH
Slide 5: Gaming
GAMING Logitech G502 HERO Gaming Mouse is an upgraded version with the same iconic shape as the original Upgraded with the highest performance and most accurate HERO (High Efficiency Rated Optical) 16K sensor Features an all-new lens and updated tracking algorithm for ultra-precise tracking Includes
Slide 6: Gaming
GAMING Logitech G PRO Wireless Gaming Mouse is the first Logitech G LIGHTSPEED™ wireless gaming mouse designed with and for professional esports athletes Developed over two years and in collaboration with more than 50 professional esports players Designed to be ultra-lightweight at 80g and strong du
Slide 7: Blue Microphones
BLUE MICROPHONES is a premium USB microphone designed for broadcast- quality podcasting, YouTube productions, game streaming, Skype/VoIP calls and voiceover work Features the legendary Blue sound quality, a compact design, and plug 'n play operation with a PC or Mac Offers no-latency headphone outpu
Slide 8: Mobile Speakers
MOBILE SPEAKERS and have been redesigned with two-toned, high performance fabric and with deeper bass and improved clarity Upgraded with a new IP67 rating — waterproof, drop proof and dustproof All-new Magic Button enables play, pause and skip tracks capabilities directly on the speakers without fum
Slide 9: Jaybird
JAYBIRD Jaybird X4 Wireless Sport Headphone is a do-it-all wireless headphone designed for the all-around runner and outdoor athlete Not only sweat proof but now also waterproof with a more comfortable fit Delivers eight hours of battery life and custom sound with fully adjustable EQ in the Jaybird
Slide 10: Pointing Devices
POINTING DEVICES Logitech MX VERTICAL is an advanced ergonomic mouse that combines science- driven ergonomic design with the elevated performance of Logitech’s MX series MX Vertical’s natural handshake position reduces muscle strain by 10 percent and promotes a more ergonomic posture Provides a best
Slide 11: Tablet & Accessories
TABLET & ACCESSORIES Logitech POWERED was designed and engineered to wirelessly charge iPhone XS, XR, X and 8 series Supports charging in both landscape and portrait modes, resting your phone’s screen at the perfect angle for watching movies, writing notes, and any other app or activity Fine-tuned t
Slide 12: Financial Results
FINANCIAL RESULTS 4
Slide 13: Q2'19 Results Maintain Strong Momentum
Q2'19 RESULTS MAINTAIN STRONG MOMENTUM seo | 5032 YoY % chg 9% 12% YoY % chg (CC) 10% 1% Gross profit 260 231 13% % margin 37.6% 36.5% 110 bps Operating expense 175 159 10% % of sales 25.4% 25.2% 20 bps % margin 12.2% 11.3% 90 bps Net income 83 66 25% % margin 12.0% 10.5% 150 bps Earnings per share
Slide 14: A Record September Sales Quarter
A RECORD SEPTEMBER SALES QUARTER mem Pointing Devices Keyboards & Combos 132 PC Webcams 28 Tablet & Accessories 37 Video Collaboration 57 Mobile Speakers 77 Audio & Wearables 62 Gaming 161 Smart Home 119 27 31 46 91 62 114 1% 12% 3% 4% 19% 20% 24% 25% (15%) (14%) (1%) 0% 41% 43% (50%) (49%) Gaming +
Slide 15: Asia Pacific Led Our Global Growth
ASIA PACIFIC LED OUR GLOBAL GROWTH YoY Sell-through (US$) (ce) oe Americas EMEA 218 218 0% 1% 3% Asia Pacific Sales growth YoY % (CC) Sales growth YoY % (US$) 30% 26% 23% 23% 28% ¥ 20% 24% 16% 13% 9% 2% 2% 1% 5% : We} Q2'18 =@318 =Q418 =QI'19 §=@219 Q218 =Q3'18 «418 =I §=a2'19 ‘Americas EMEA Asia Pa
Slide 16: Gross Margin Remains Within Target Range
GROSS MARGIN REMAINS WITHIN TARGET RANGE 38% 37% 36% 35% 34% 33% 32% Note: Figures are for illustrative purposes only. Non-GAAP Gross Margin pee eee One-time cost from dual DCs! Targ One-time benefit from legal settlement 2 Q2'18 Q3'18 Q4'18 alg Q2'19 Q2'19 gross margin +110 basis points YoY to 37.6
Slide 17: Disciplined Investments to Sustain Growth
DISCIPLINED INVESTMENTS TO SUSTAIN GROWTH Sales & marketing 13% % of sales 16.9% 16.3% 60 bps Research & development 38 35 7% % of sales 5.4% 5.5% (10 bps) General & administrative 21 21 (3%) % of sales 3.0% 3.4% (40 bps) % of sales 25.4% 25.2% 20 bps Operating expenses +10% as we continued to strat
Slide 18: Strong Consistent Cash Flow Generation
STRONG CONSISTENT CASH FLOW GENERATION Cash from operations Ending cash balance ' 426 Inventory 359 Inventory turns 49 DSI 74 Accounts receivable 460 DSO 60 Accounts payable 441 DPO 91 Cash conversion cycle 43 days 406 330 49 73 278 40 387 21 28 0 turn 1day 182? 20 days? 54 5 days 27 days | 16 days?
Slide 19: Confirms Fiscal Year 2019 Outlook
CONFIRMS FISCAL YEAR 2019 OUTLOOK FY 2019 OUTLOOK Sales CC growth Up 9-11% Non-GAAP operating income $325 - 335M Currency FY 2018 average rates Non-GAAP effective tax rate 7-8% Cash from operations 1x non-GAAP operating income Capex ~$50M Note: Comparisons are YoY unless otherwise specified.
Slide 20: Appendix
Slide 21: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION “©! Three Months Ended Six Months Ended September 30, September 30, SUPPLEMENTAL FINANCIAL INFORMATION 2018 2017 2018 2017 Gross profit -GAAP $ 256,117 $ 227,73
Slide 22: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION “'®) Three Months Ended Six Months Ended September 30, September 30, SUPPLEMENTAL FINANCIAL INFORMATION 2018 2017 2018 2017 Operating income - GAAP $ 65,132 $ 5
Slide 23: GAAP to Non-GAAP Reconciliation Notes
GAAP TO NON-GAAP RECONCILIATION NOTES Note: These preliminary results for the three and six months ended September 30, 2018 are subject to adjustments, including subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q. (A) Non-GAAP Financial Measures To suppleme
Slide 24: Sell-Through Data
SELL-THROUGH DATA Measures sales of our products by retailer customers to consumers and by our distributor customers to their customers Compiled by Logitech from data supplied by our customers Customers supplying sell-through data vary by geographic region and from period to period, but typically re
Slide 25: Logitech
logitech
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